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this committee. I have had some hunches about the way they operate over there so long, I just have to believe you are going to come up with suggestions that are going to be quite agreeable to me, at least some of them will be.

We want to work with you, and we want to take advantage of the work product. But I am very much concerned. The reason I went outside, in consultation with my counterpart on the Senate side and the majority and minority members of this committee, for the study of the health plans was that we wanted a creditable study that would not be associated with anybody's particular political philosophy or political objectives. We are hoping that we could get that sort of thing from the President's Private Sector Survey, but I have to share with you at this moment a deepening concern for the credibility of your work product. I would hate to see private corporations putting this much investment into something that is going to be discredited, in terms of not producing that which the President told the American people he was appointing them to do.

Let us just take your task force. How many of the people working in your task force are full-time employees of private corporations? Roughly.

Mr. PRANGER. I would much prefer to be very accurate on it. I obviously am not, sir.

The CHAIRMAN. You are not? Mr. PRANGER. No. This is just a one-time contract with them, and I for me. I am fulltime on the task force but not other than that.

The CHAIRMAN. You are employed by this company while you are doing this study?

Mr. PRANGER. Yes, sir.

We have two of them who are retired people from the firms, and they were brought back for the jobs. Other than that, the rest of them are full time, regular career employees, or whatever you call it, in the private-sector employ.

The CHAIRMAN. So they draw whatever salary and expenses and health benefits and whatever they have from-

Mr. PRANGER. The company is bearing the full cost, in terms of salary and expense; yes, sir.

The CHAIRMAN. These are top or midlevel executive personnel? Mr. PRANGER. Yes. For the most part, they are at the vice president, some at the senior vice president, and others at the assistant vice president level. We probably have maybe one person on there who is a relatively young employee, who is really on her way up in the firm, but for the most part they are key corporate officials, sir.

The CHAIRMAN. Although it is not within the purview of this committee, but one speculates about the tax treatment of those expenses against the question of ultravires acts by corporate officers, using corporate resources for purposes not contained in the charter of the corporation. I do not know how a gas production company in Pennsylvania justifies the tremendous expenditure they are making studying the Postal Service, since they do not do any business with the Postal Service. There is no way the shareholders of that corporation will ever benefit directly from that payroll expenditure, but that is not your problem nor mine at this point. However, it does bear on this assertion that this is a tax-free gift to the American taxpayers. It sounds to me like it is a pretty expensive tax writeoff, and we ought to be very concerned that we are getting our money's worth.

Thank you very much.

Our next witness is Rosslyn Kleeman, Associate Director, Federal Personnel and Compensation Division, General Accounting Office.

Without objection, your prepared statement will be inserted in the record, and you may proceed to add to it, supplement it, or summarize it in any way that you feel most comfortable.

[The prepared statement, and a September 21, 1982, letter, follow:]



EXPECTED AT 10:00 a.m.
September 15, 1982






Mr. Chairman and Members of the Committee:

I am pleased to be here today to provide a progress report on

the information you asked the General Accounting Office to obtain

about the President's Private Sector Survey on Cost Control.


President announced this effort in February of this year and es

tablished, by executive order on June 30, the Executive Committee

which is responsible for conducting this survey.

The Executive

Committee's stated purpose is to conduct in-depth reviews to recommend ways to improve management and reduce costs in the Federal


The Executive Committee plans to complete its work

and report to the President by the end of the year.

You asked us to collect the following information

--the backgrounds and responsibilities of all participants, --the legal authority for such an effort,

--the organizational structure for conducting the survey.

--the process for doing the work through task forces-

especially the task forces on Federal personnel and the Social Security Administration,

--the involvement of Federal agencies and the White House,

--the source of funding and costs to the Government, and

--the clearance process to protect against conflicts of in


The organizations that help conduct the survey consist of a management office to coordinate and manage day-to-day activities; a nonprofit foundation that collects money and resources from private sector firms to support the effort (as of July 31, 1982, firms had contrib'ited or pledged about $1.8 million in cash to the foundation); the executive committee of about 150 members, most of whom are leaders of large corporations; and 36 task forces, each of which is studying a particular organization (for example, the Air Force or Department of Labor) or function (for example, personnel management or ADP). As of mid-August, there appeared to be about 1,000 people in the above organizations.

Through a charter with the Department of Commerce, which may

accept gratuitous service, the executive committee is an advisory

committee as defined by the Federal Advisory Committee Act.


committee provides policy direction and oversees the 36 task for


Executive committee members are Special Government Employees and are required to disclose their financial interests to the White House General Counsel and to the agencies being reviewed

by the task forces that they cochair.

Task force members do not

have Federal employee status and do not have to disclose their

financial interests. They are required to certify that they will make no unauthorized use of information gained during their review.

At least two executive committee members serve as cochairs

for each task force. Each task force studies its assigned Federal area through four phases over a 16-week period. Based on this study, each task force will summarize its findings and recommenda

tions in a report. From these 36 task force reports, a summary

report will be written. We understand that OMB plans to begin implementing these recommendations as part of a new Government

management reform effort.

Through written requests, meetings, and interviews, we have obtained some information that you requested giving us an understanding of how this survey is being conducted and the involvement of Federal agencies. However, we have not yet collected all the information that you requested. For example, the management office has not provided :

--A complete list of all participants, their backgrounds, and

their responsibilities. This information has been provided for only a small number of participants, primarily executive committee members.

--Legal guidance for establishing the organization, clearance

processes, authority, and conformance to Federal advisory committee provisions for this survey.

--Task force objectives, work plans, and progress reports.

--A full description of the role and function of all groups

shown in the management office's organization chart.

In response to our written requests for this and other information, the Director of the management office informed us on August 13, 1982, that because of "certain legal implications

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